Although Trump accepted the proposal of the commission leader, Ursula von der Laen to suspend 50% of EU duties by July 9, the uncertainty about the outcome of the current trade dispute between USA and EU It remains.
EU representatives will go to the US today (26.5.2025), while the Commission continues to focus on the decline, especially as Tram accepted the proposal of the commission leader, Ursoulas von der Layen about suspension of duties 50% by July 9th 2025. For top officials in Brussels, Trump’s duty threats did not come by accident, as they see his move as an attempt to increase pressure in Europe before the start of the decisive phase of negotiations.
According to Handelsblatt, EU negotiators want to facilitate the US with duties reductions for industrial products, cars and some agricultural products, for example. At the same time, EU Trade Commissioner Maros Sefkovic stressed: “We are ready to defend our interests.” Brussels were clearly placed by letter to Washington.
“Europe remains committed to achieving a fair trade agreement with the US,” Sefkovic said on Friday night after a telephone conversation with his US counterpart Jameson Green. The conversation took place after Trump’s last duties announcement. Sefkovic added that trade between the EU and the US must be governed by “mutual respect” and not by threats.
The Commission is currently discussing with the stakeholders for retaliation in US products worth 95 billion euros. Recently, voices have increased within the Commission and the Member States seeking balance in the negotiations. Propose to clarify possible countermeasures against US services.
When asked how an EU agreement could look like, Trump replied: “The deal is 50%.” The EU desperately wants to conclude a deal now, Trump said, “just doesn’t do it right.”
Top Commission officials see things differently. They see Trump’s threat as proof that they are making the right negotiating hard. According to EU circles, the threat shows that Trump does not like the negotiating strategy.
German government supports Commission’s strategy. German Finance Minister and Vice -Chancellor Lars Clingbel (SPD) talked to his colleague Scott Besed last Wednesday (21.5.2025) and Thursday (22.5.2025) during the G7 meeting in Canada. The Vice -Chancellor also sent a double message: “Our hand is outstretched,” Clingbail said. At the same time, he made it clear that The EU will act “united and decisively” and will receive countermeasures if no agreement is reached.
The German government insists on this line, even after Trump’s announcement for 50%. Clingbail reiterated his statements last weekend (24-25.5.2025) that a customs dispute would harm both the EU and the US. The Federal Chancellor Friedrich Mertz (CDU) was held in public statements on the matter. He is reportedly planning to travel to Washington soon.
EU tariff offering
Immediately before the re -escalation of the tariff dispute, the EU and the US had exchanged proposals for a possible agreement. However, according to EU diplomats, US negotiators considered the EU offer inadequate.
According to Handelsblatt, the EU had offered its negotiating partner the following points in a letter:
- to introduce more natural gas than the US,
- reduce duties in industrial goods, cars and certain agricultural products,
- to abolish non -tariff trade barriers.
This could include, for example, the mutual recognition of conformity tests for car approval.
According to diplomats, in Sefkovic’s letter, the EU also marked its willingness to discuss additional high -performance microchip markets for artificial intelligence and take joint action against Chinese surplus production capacity.
There is also a willingness to cooperate in investment and export control closer. However, the EU also made it clear in its letter that tariff reductions should only be reciprocal. The EU does not want to accept Trump’s minimum duty of 10% as a new threshold. The EU is also reluctant to negotiate the issue of harmonizing food standards and the weakening of EU digital legislation.
Sefkovic indirectly rejected the US government’s request to withdraw EU DMA and DSA laws or to urge Member States such as Austria and France to abolish their digital taxes: law in Europe – as in the US – is not deprived of parliament.
US negotiators are clearly unhappy with this attitude. According to Handelsblatt’s diplomatic sources in the EU, US trading representative Green had already called for Europe to offer more before Trump’s duty threat.
Today, Bernd Lange (SPD), chairman of the European Parliament’s Commerce Committee, travels to the US. There he will speak with commercial representatives and members of Congress. Lange is also of the opinion that the US president did not accidentally publish his threat on Friday.
“Trump obviously wants to put pressure on specific negotiations – but that doesn’t lead anywhere,” Lange told Handelsblatt. “I will also clarify it once again to my partners in the dialogue: The EU was founded to ensure peace and abolish trade barriers – not to harm the USยป.
The prevailing view in financial markets is also that Trump’s threat is just a negotiating tactic. Following its announcement, the German stock index (DAX) lost 3% on Friday, but then completed the transactions only 1.5% lower. In the US, the top S&P index lost only 0.7%.
“The escalation of rhetoric for EU duties is very reminiscent of the US approach to China,” says Laura Cooper, a strategic investment consultant by Nuveen’s assets management company. He assumes that the negotiations will lead to “a milder result”. It is unlikely that Europe will end up in higher duties than China.
European companies face higher taxes
Trump’s threats go beyond the issue of increasing duties. The US president also wants to impose higher taxes on European companies in the US. The planned budget bill, which overcame the first obstacle to the House of Representatives, includes a paragraph on “imposing measures against unjust taxes abroad”. Trump had repeatedly argued that European VAT is “unfair”.
Since the 1970s, the US has argued that VAT is a hidden export subsidy because it is also imposed on imports, but EU exports are exempt. The US president believes that this is putting his country at a disadvantage – and calls for retaliation.
For companies based in the so -called “other countries that import discrimination”, the tax rate currently in the US could be increased by five additional percentage points each year as a result of the law, with a maximum of 20 percentage points after four years. Experts of the EY Consulting Company are already talking about “extensive and significant implications” if the law enforcement.